Hello
I just would be very grateful for advice on any tax consequence in the case of a private company reducing share capital.
Current Balance Sheet:
Share Capital 10
Share Premium 1000
P&L Reserve (900)
The entries I believe to be made from an accounting perspective are:
Dr Share Capital 9
Cr Cash 9
Dr Share Premium 900
Cr P&L Reserve 900
Balance Sheet becomes:
Share Capital 1
Share Premium 0
P&L Reserve 100
Is there any tax consequence of creating a distributable reserve this way on the 900 cancellation of the share premium account?
Many thanks for any help you can give.
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